Currently, applicants submit loan applications to lenders who may extend credit to the applicants for purchases. As these loans begin to accumulate, the lenders often bundle their portfolios of loans together for sale. Investment banks and others often purchase these bundles of loans to form one or more loan securities.
One of the problems investment banks and others who purchase these loans face is in identifying the appropriate loans to purchase. Currently, an enormous amount of time and capital is expended in the process of manually identifying and analyzing the appropriate loans to select to include in a security.
In view of these expenditures of time and capital, the loans are typically only purchased from large and well known lenders. However, only a portion of the loans being made are held by these large and well known lenders. Accordingly, a large number of loans being made by small to midsize lenders, such as credit unions and small regional bank and lending institutions, are less able to be included in securities.